Over the weekend Apple issued a response on its support page to complaints regarding the iPhone 5's camera. The issue that Apple addressed was "a purplish or other colored flare, haze, or spot is imaged from out-of-scene bright light sources during still image or video capture."
According to Apple's support page, the issue not only exists on the iPhone 5, but on every generation of Apple smartphone. Additionally, Apple went on to state that the effect is a direct result of capturing images with out-of-scene light sources present.
"This can happen when a light source is positioned at an angle (usually just outside the field of view) so that it causes a reflection off the surfaces inside the camera module and onto the camera sensor."
Apple also introduced a fix that, while simplistic, is likely to enrage as many consumers as it helps. Akin to Steve Job's infamous response "don't hold it that way" (solution to the iPhone 4's antenna issue); Apple suggests that "moving the camera slightly to change the position at which the bright light is entering the lens, or shielding the lens with your hand, should minimize or eliminate the effect."
While Apple's claim that other smartphones (including iPhones) exhibit the same problems under similar conditions may be true, the iPhone 5 seems to be much worse at dealing with out-of-scene light sources, even when compared to other iPhones.
This could make sense as Apple's latest model offers a number of changes to the camera sensor, including a new scratch-resistant crystal made of sapphire. While unconfirmed, the sapphire crystal is widely speculated to be the cause of the iPhone 5's tendancy to show purple flares.
Others have theorized that the issue may be a result of iOS 6, though this seems far less likely as the iPhone 4S appears to perform far better than the iPhone 5 under similar conditions.
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